In single entry system, profit is generally determined by: MCQ with Answer and Explanation

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In single entry system, profit is generally determined by:

A. Cash book balance

B. Preparing Trading and P&L A/c

C. Trial balance

D. Comparing opening and closing capital

Answer: Option D

Solution (By JKSSB Mock Tests)

Under single entry, incomplete records are used, and profit is often derived from the statement of affairs (net worth comparison) with adjustments.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

The 'Tolerable Error' in audit sampling is:

A. Actual error

B. Zero error

C. Expected error

D. The maximum error in the population that the auditor is willing to accept and still conclude that the audit objective is achieved

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Correct Answer: Option D

Explanation:
Tolerable error is a planned level of misstatement.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #2

The Trading Account is prepared to ascertain:

A. Financial Position

B. Net Profit or Net Loss

C. Gross Profit or Gross Loss

D. Cash Flow

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Correct Answer: Option C

Explanation:
Trading account compares direct revenues (sales) with direct costs (purchases, direct expenses) to find the Gross Profit or Loss.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #3

An audit that is conducted between two annual audits is called:

A. Final audit

B. Statutory audit

C. Interim audit

D. Continuous audit

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Correct Answer: Option C

Explanation:
Interim audit is performed in between the year, often for dividend declaration or half-yearly results.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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